It sounds like there might be some confusion between 1080i and 1080p. First off, the "p" behind the number means progressive and the "i" means interlace. For 720p, the TV displays 720 horizonal lines all at once, whereas a 1080i TV displays only half of it's 1080 horizontal lines, so for every frame of video, 1080i must display 540 lines twice. The number of 1080i is a bit misleading. I think it should technically be called 540i. They both look stunning on slow moving HD content. When some fast moving action is displayed, you may see some edges or softer images on 1080i because the image is moving faster than the TV can display both passes of 540 lines cleanly. The 720p won't show as much aliasing around diagonal edges when fast action happens. Most sports fans I've spoken to prefer 720p.
Now, part 2 of the lesson: 1080p is like 720p whereas the entire 1080 lines of resolution are displayed at once. In theory, this will give the best image. Problem is, no broadcast station can send 1080p because of the HUGE bandwidth it would require to get the signal over the air. The 1080p TVs would make sense if you hook up a device capable of real 1080p display, like the Sony PS3 or a new BlueRay DVD player.
Lesson 3: How a TV looks when it displays SD material isn't so much a matter of 720p vs 1080i, it's dependent on the video scaler that the TV maker puts into the set.
Lesson 4: HDTVs generally look crummy when displaying SD materail. SD material may have 240 horizontallines of resolution. When you have a TV that has a native resolution of 720p or 1080i (actually 540), how do you think the TV fills in the extra 400 lines of resolution? The TV's scaler re-scales the signal up to it's native resolution. Again, the quality of this process depends a lot on the quality of the scaler the company puts into the TV. I can guarantee you that the Kodak LCD TV won't have the same quality video scaler as the Sony XBR.
Lesson 5: It doesn't matter if you have a TV that is 720p, 1080i or 1080p, it will take whatever signal you give it and rescale it to it's native resolution. Again, the quality of this process depends on the quality of the video scaler the company puts in the TV.